Boris Johnson Reneges on Tax Cut Promise to Contractors

Tax Cut Promise to Contractors

Boris Johnson made a major tax cut promise to contractors and other professionals. He said that he would raise the threshold of the upper rate of tax from £50,000 to £80,000. Contractors would save £3,000 a year.

That was when he was standing for the leadership of the Conservative Party. He has now quietly dropped that promise according to weekend newspapers. For once contractors believed that they were going to get something from the Government. It would alleviate some of the losses that contractors will get from the new IR35 reforms in April 2020.

But it was not to be.

He’s changed his mind. Maybe he didn’t mean it in the first place.

Who knows?

Questions on Tax Cut Promise to Contractors

1. What can contractors expect from the Conservatives?
2. Do the Conservatives believe contractors to be all tax avoiders?
3. Where did the Conservatives get their views on Contractors from?
4. When will the next IR35 shock come?
5. What happened to the tax cut promise to contractors?

What Can Contractors Expect From the Conservatives

It looks, though, as if Boris Johnson hasn’t dropped another pledge.

He said, in the Queen’s Speech that “We will increase fairness and and flexibility in the labour market by stopping employers and workers experiencing significantly different outcomes from flexible forms of working.”

This echos Theresa May’s statement that “it is an unfair anomaly that a self employed person earning £100,000 a year pays less tax than en employee earning £100,000”.

We know that is not comparing like with like.

Do the Conservatives Believe Contractors to be All Tax Avoiders

However, that is the basic premise that informs decision on IR35 that the Conservatives make. This feeds through into Treasury Minister saying in answer to a question on IR35 that there is 10% compliance in this area. The courts disagree with him and it is the courts who enforce the law.

Where Did the Conservatives Get Their Views on Contractors From

The root problem we have here is that lobbying by the big consultancies, who have always seen contractors as rivals, is far more effective than the lobbying done by contractors and their representatives.

That’s why Theresa May believes there is an ‘unfair anomaly’ and this is why Boris intends to carry on with bashing contractors where Theresa May left off.

When Will the Next IR35 Shock Come

There is undoubtedly another shock coming for contractors as regards IR35.

The current Government obviously want to take it from 10% of contractors being compliant with IR35 to 100% – or as close as they can get..

Contractors got a stay of execution with the cancelling of the Budget on November 6th.

However, they have not changed their minds and they need lots of money to fulfill their pronises.

What Happened to the Tax Cut Promise to Contractors

So, it looks like contractors will be the patsies once again.

And they won’t even have their £3,000 from a promised raising of the tax threshold from £50,000 to £80,000 that Boris Johnson promised.

Here’s the original article making the original promise to contractors.

Freelancers Friend Boris Johnson to Save Freelancers £3,000 a Year in Tax

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